Tax Plan Will Increase the Deficit

Since people are complaining about too much Trump talk, perhaps this board would like something more wonkish.

The proposed Republican tax cuts will not pay for themselves through growth, and add "significantly" to the long-term United States debt, Fitch Ratings said in a Tuesday report.

https://www.cnbc.com/amp/2017/11/07/gop-tax-cuts-will-not-pay-for-themselves-add-to-us-debt-fitch-report.html

Is the addition to the national debt an acceptable tradeoff for this bill?

Was Obama´s doubling of the national debt acceptable? If yes then you have your answer as to Trump´s tax plan.

While it should be decreased , if the benefits to the economy is a much smaller deficit , then yes i think it´s acceptable , Trump may add a bit but a good bet is that he wont double it like Obama.

1.5 trillion over a decade.

Which is a lot better than almost 10billion over 1 1/2 term like Obama :)

Again the economy he inherited wasn't the best. We have been through this already...

The only good thing I see with the tax plan is lowing the corporate tax rate, pass-though tax rate, and eventual repeal of the estate tax. The deficit increase doesn't bother me as much as repealing deductions for state income and sales taxes, as well as capping property tax deductions. That is really going to hurt some of the blue states, or any states with higher state taxes.

Look at all those fiscal Republicans showing their true colors. I see the spin has already started. Obama isn't president, and this tax plan is adding to a deficit that the GOP decries is woefully unbalanced.

But it makes the rich even richer, correct?

That's been the only thing republicans have consistently tried to deliver upon. Take healthcare away from millions? Give that money to the rich. Giving tax breaks to corporations allows the rich to pocket millions. Take funding away from schools? You know that money is going towards the rich. It's literally all they give a shit about.

Yes, but the debt did not come from a "bad" Economy. It came from the programs Obama put in place.

But yes we have been through it.

Third times the charm, right?

I'm sure this time voodoo economics will work.

Technically it is working with respect to how the people gunning for these tax breaks think, it's padding the pockets of the rich while simultaneously ballooning the deficit eventually calling for cuts to entitlement programs.

That IS how they are designed to work. This nonsense about trickle down economic stimulation is simply cover for their base so they can justify it.

It's very forceful, but it's not robbing anyone. While some deductions are repealed, standard deductions will increase, which about 70% of people claim. It all depends on your state. In places like California, this plan will actually hurt the rich more than the poor. Since it has a high state income tax that will not be able to be deducted, the rich are going to be paying almost 50% in state and federal income tax, which is nuts.

When it comes to corporate taxes, we need to remain competitive. They're currently higher than France, UK, Japan, Germany and a bunch of other countries that have massive welfare systems, yet still manage to get by without robbing corporations. Corporations do not "pocket" money. They spend money to make money.

Estate taxes are just dumb. They're easily avoided by people simply transferring wealth to their children once they get older, thus making it more of a "gotcha" tax for wealthy people who die suddenly.

The donors are playing hardball on this tax plan.

House Republican: my donors told me to pass the tax bill “or don’t ever call me again”

@Jacanuk: "Was Obama´s doubling of the national debt acceptable? If yes then you have your answer as to Trump´s tax plan."

Was it? You tell me. I'm asking for your opinion.

@Jacanuk: "Which is a lot better than almost 10billion over 1 1/2 term like Obama :)"

Keep up n mind this is 1.5 trillion over current projections, not 1.5 trillion as an absolute sum.

I'd rather like to know your opinion on this as well.

I'm completely opposed to the proposed tax plan. Deficit needs to be reigned in first.

The 1.5 trillion is not a total. It is in addition to the "Obama deficits" that are already going to be there. Last projection I saw for next year was $550 billion, and that was before the Cut Cut Cut act was being discussed. It will be closer to $700 billion next year if everyone's numbers are correct. But if you want to read more on the subject, go here:

http://www.crfb.org/

@Serraph105: Will do, just gotta get to a real pic first.

Mobile typing is my nemesis.

Rich people pay me, they pay a lot of people, they invest in a lot of things which pay people... allowing them to do this is a good idea. Its stupid to think that people are the enemy while asking another group of people with guns to take money away from people that would have accountability with their money through the market... And throw it away on shitty services that can't move fast enough to meet demands because of central planning.

The government on the other has to go through services via democracy and end up funneling money into shit services like Obamacare... which can't move fast enough to keep up with demand and is dragged to shit be bureaucracy... while yes they are insuring people that weren't insured before, its also fucked so much up that there are people that can no longer afford it if you don't have enough subsidiaries. Healthcare will never be a right, its a service, and the only reason it works in Sweden is they have strict immigration laws, good work ethic, and leverage US's products for their health care. Even they are rolling it back and privatizing health care. Canada? Canada you can wait for 6+ ours just to get triaged if its not a serious injury.. often recommending private health care.

Trickle down + supply-side are both important... people with money don't need to invest it in the economy, they have it in a bank, which the banks loan out... or invest it in startups/services or w/e. Basically its always good for the economy for the government to take only what it needs.

And generally entitlements often erode work ethic over time, you can see that with the decline of the black family when they introduced welfare in America... black people were doing better when there was explicitly more racism.. entitlements made things worse as it rewarded bad behavior reinforcing poor culture.. Entitlements should work like a safety net... not like a retirement plan. You fall, the government catches you, but your tossed back on your feet so the net isn't overloaded if too many people fall... or start climbing down into the safety hammock.

Although the big problem is how to we install personal responsibility and work ethic back into the culture?

I'm going to limit my response strictly to increasing or decreasing the deficit as a mathematical abstract because if I veer off into details on how, why, or by what measure then we'll really get into the weeds.

Deficits should trend towards/average out to zero, but they are a very useful tool in managing the economy and should still be used appropriately.

Deficits should be positive when the economy hits a recession and negative when growth is sustained. Let's both praise and criticize a couple recent presidents as examples.

Bush increased deficits during a growth period by cutting taxes. This was a bad idea, and the effect was near zero economic impact combined with rising deficits that stunted our ability to respond to the recession of 2008. That being said, he did implement a stimulus during that recession which helped blunt the impact (1).

Likewise, Obama also implemented a stimulus package later during this recession which also helped blunt it's impact (2). That being said, he should have allowed the entirety of the Bush tax cuts to expire after we established a growth period again because the inability (or lack of will) to return our deficit to a negative figure will blunt our ability to respond to the next recession (3).

As for whether now is the right time to add to the deficit, I don't believe so (for the same reasons that I believe the Bush tax cuts should have been allowed to expire years ago).

Footnotes:

(1) We can quibble about how that was done, how much was done, and by what mechanisms, but I'm avoiding that for the sake of this post.

(2) See above.

(3) Not to mention that there's a true monetary cost to carrying significant debt loads, as every dollar paid in interest on that debt is a dollar that can't be utilized elsewhere.

What?

@mattbbpl: I'm gonna be honest, I really meant Jacanuk in hopes of pressuring him to answer his own question.

If it makes you feel better I find your posts to be far more intellectually stimulating.

I'm honestly not sure what to make of this post seeing as it's all over the place and doesn't really make a cogent point...more or less devolves into rhetoric of Entitlements = Lazy (ignoring that most welfare recipients are the elderly or disabled).

As far as supply side is concerned, there isn't any solid literature supporting the merits of it providing an economic boon. We've already had 2 rounds of this to supply us with data: The Reagan tax cuts and the Bush tax cuts.

Haha, that makes more sense, really. I think you and I are largely in agreement on the whole fiscal/monetary policy thing.

Great post. Agreed BIGLY that Bush was wrong for the cuts, however he did realize the necessity for the bailouts. Likewise with Obama, the stimulus was needed but the solidification of the Bush tax cuts on his watch are a huge blemish on his legacy.

One thing to note though. The process of using deficits as a counterweight to stunt recessions or plan for future ones is always subject the governments ability to work as planned. The people in power are usually shielded by these economic ebb and flows limiting their incentive to plan for them accordingly. They'd rather institute self affirming ideologies than provide pragmatic solutions.

I tested this out today. According to a preliminary analysis on the tax plan roughly a third of Americans could see their taxes raised. A Republican family member of mine sent it to me in disgust because he's in one of the demographics projected to see an increase. When I suggested that it's OK because that upward distribution will trickle down to him later in greater amounts, he caught the irony.

It appears people are only for trickle down economics when they think they're the ones on the top.

Is the only way you can gauge success, no matter how mediocre, is to hold it in contrast? Seriously? Have you no barometer of your own? Is there actually a conservative agenda, or just an anti-liberal/Obama one?

I made two points, basically first people having money is good... there is no real cases where its not good... even if the person is rich that puts capital back into the economy in some way that can be invested/loaned out.

Second I'm not ignoring elderly or disabled, or said that people are lazy.... see your problem isn't what I said its your inability to understand something simple. Don't assume what people are saying and ascribe ideas. Although I did misspeak. I meant to say trickledown + demand side economics. Which may have been confusing in the first part.

I said entitlements generally reward bad behavior. Like single mothers on welfare have no incentive to marry of try to find a stable home for their children. My sister is in this program as well and she has struggled and generally can't get off of it without being significantly worse. Even Denmark/Sweden has had to dial it back a bit because it was eroding their strong work ethic. We've come to view entitlements as rights... and that changes peoples behaviors. The last I heard 20% of us men 25-45 aren't even in the workforce. The other number we here that's much smaller is the amount of people looking but can't find work. Its a combinations of factors, a large portion on disability, which may have a large portion of people on pain killers and becoming dependent, instead of you know putting people through a rehabilitation program. They become dependent on disability even if they are capable of getting better with the right rehabilitation program. Or like social security has allowed people to change their expectation for the future, so they don't have kids, or don't save... and unless something is done social security won't be able to pay out all it's entitlements from taxes and potentially screwing over people that had no kids or didn't save.

Basically I think funding entitlements = bad in many cases... We live in a society that gives a great deal to the poor and needy without anyone with a gun taking it from them... I would much rather see better social institutions set up for this by private citizens instead of going through the government which isn't fast at responding to issues or accountable for issues it creates. And taking money from the rich because they are rich and we need to pay for entitlement... undermines the rich people having capitol to do rich people things. Like I work for rich people, I have stocks, I want them to have more money so the startup I'm at succeeds let alone has more money for better equipment. It was a direct counter to your first point.. which is similar 'rhetoric' of the opposing view of, if we don't take more of rich people's money they'll still have it... granted its usually worded to make it sound like they are stealing the money they earned... which is shit rhetoric btw. Its literally how Marxism works which ended up murdering/killing an unthinkable amount of people.

@mattbbpl: Yes I think it´s acceptable to lower the tax and increase the debt by 1.5trillion over the next 10 years.

As to the plan itself , i must admit i could not care less about the proposed 2k more i might get a year. The most interesting part is the corporate tax cuts, which seems to benefit more.

So, in the last 70 years we've reduced corporate taxes by almost 40%, more if you consider the subsidies they get (where far too many pay zero in taxes).... have we had a single benefit by doing this? Can you demonstrate this idea in the real world?

If anything, we need to jack it back up to 70%.

Its higher risk for everyone... its pretty simple but likely hard to track in a statistical manner because people will fail in different ways... couldn't afford equipment, couldn't higher enough help, cut corners on a product and people didn't like it...

WTF are you even talking about here?

Are you responding to my comment about raising corporate taxes back to 70%? Because no, history tells us nothing you're saying would happen. The high tax rate we had on corporations in the 40s, is at least a quarter of the reason America had the largest economic boom the world had ever seen. And its not hard to understand why. Higher taxes cause corporations to expand farther and faster. Higher taxes allow for small business loans that are reasonable and available. Blah blah blah, this is economics 101.

right because of ingenuity and prosperity could survive high taxes. Considering there was a boom across the entire world all the way up in to the 80s your linking high taxes with the boom... which is stupid, correlation does not mean causation.

@waahahah: well yes they could and in the past have survived it...

You say correlation does not mean causation, which is true, but you've offered neither a correlation or a causation to support your stance.

He made the assertion... with no evidence... and I did back it up by pointing out a world wide phenomena, it wasn't an America only thing, so there isn't any direct relationship from America's prosperity an high taxes.

Its braindead if you take a step back and think about it... how does stealing money from companies allow them to expand faster? It doesn't, they'd need to be making a shit ton of money so the high taxes don't effect them that much.

WTF. You want single parents to give up their children. How fascist of you.

Social Security is not an entitlement. It's paid into by the employee. You throw the word entitlement around without fully understanding it. Also for rehabilitation you then have to get the government involved like those other countries you mentioned. The US is the ONLY country that doesn't make health available for everyone.

And if you want to talk about welfare I notice you totally ignored corporate welfare. You ignored outsourcing. You ignored off shore investments. Those are things that need eliminated. It's hypocritical to attack individuals that need help but want to continue to subsidize corporations.

Then again when you went on your anti minority rant I knew you shouldn't be taken seriously. Bigots never should.

Various booms and various collapses happen all the time what does that have to do with anything? And how is it you end your sentence with "correlation does not mean causation" while starting it with that nonsense? How are you linking America's boom to say... Korea or Vietnam? I kind of want to give you China and Japan out of pity for how pathetic you are on this topic, but even both of those came long after America's boom and Japan was already booming. America's involvement with those countries didnt even start until the late 70s.

We know the higher tax rate on corporations was a big factor in our economic boom, again, this is economics 101 and a historical fact and is not up for debate or question. If you think otherwise, take it up with academia, not me.

I made those statements, not toast. And as i mentioned in my second response to you, its not me you're debating here, its all of economic history and academia.

As for your second paragraph, you answered your own question. Its shocking how logical it is right? And if you knew an ounce of economic history, you'd know how true is it. With higher taxes, corporations have one move to make more money....... EXPAND. Which does what? It actually creates jobs. It actually boosts local economies. It actually has an impact. And remember, we are talking about corporations here, not small businesses. So your original concerns are fake.

This tax plans sucks............all it's going to do is benefit the very wealthy.....like trump. Only president I can think of in recent history that generates policy for his own benefit...........and the fools think he's looking out for them. They deserve what they get.....unfortunately the rest of us get caught up as well.

With the release of the Paradise Papers and all the details coming about how rich people avoid taxes and freeload off society, it is very upsetting to see people still talk down on the poor and downtrodden like they are the reason the current economy is how it is. "Entitlements" and social security is a mere drop in the bucket compared to the amount of corporate welfare and tax avoidance vehicles out there.

Bush and Clinton.

Im guessing Obama as well, but i dont know as much about his private investments.

OMFG how stupid are you.

You want single parents to give up their children. How fascist of you.

Never said that, learn basic English.

Also that has nothing to do with fascism which is state controlled private sector. Obamacare is an example of a fascist policy.

And if you want to talk about welfare I notice you totally ignored corporate welfare. You ignored outsourcing. You ignored off shore investments. Those are things that need eliminated. It's hypocritical to attack individuals that need help but want to continue to subsidize corporations.

I didn't ignore corporate welfare. I just didn't talk about it. How are you this stupid to assume that because I didn't say something I must be in favor of it. And I'm not in favor of it. As I pointed many times, I'm in favor of giving the government only what it needs for specific things like police/army/ public utilities.

I didn't ignore offshore investments... thats gonna happen in a global market. There are other countries with businesses you might want to invest in. Its just gonna happen. And if we have high taxes on the rich they'll want to move it somewhere they won't lose as much.

Its not hypocritical because you made shit up.

Then again when you went on your anti minority rant I knew you shouldn't be taken seriously. Bigots never should.

Its not anti minority. Point out where I said something bigoted? I'm anti single motherhood which is 70% in the black community, and it leads to teaching children bad behavior that billions of dollars thrown into these school systems and racist programs like affirmative action aren't solving.

Maybe your taking up the don't blame the victims narrative? What are they victims of exactly? Poor parenting from a culture where men don't stick around and the government makes it possible for this behavior to exist by dolling out welfare to single mothers. It also makes it hard to get off as my sister could tell you, she'll make less if she gets a full time job, which she won't be able to take care of her kids.. also I'm white, my sister is white. This effects everybody but it largely is a black community phenomena.

One thing I noticed from some conservative users here is they only care about how policies effect themselves. They don't really care about society at all and buy into the entitlement and lazy ideology without any education into government policies and the effects therein on society. Hell SS isn't even an entitlement. The individual pays into it. As does the employer as part of their benefit package at work.

I'm disgusted by the individual I quoted about calling it and entitlement while he's perfectly fine with the entitlements give to big business and wealthy individuals.

What we need to do is tax corporations MORE if they outsource. Close loopholes and get after off shore wealth. If they do business in the US they have to pay their share. Period. Or they don't do business here.

Can you provide some clear peer-reviewed proof of these claims? Because the literature out there has disproven the "welfare queen" myth a long time ago.

fixed it already

As for your second paragraph, you answered your own question. Its shocking how logical it is right? And if you knew an ounce of economic history, you'd know how true is it. With higher taxes, corporations have one move to make more money....... EXPAND. Which does what? It actually creates jobs. It actually boosts local economies. It actually has an impact. And remember, we are talking about corporations here, not small businesses. So your original concerns are fake.

how is that in any way logical? And no I'm not going against history and academia I'm using a different point of view from academia on the events that happen. It was a totally different landscape back in the 40s.

Many people can't AFFORD to expand on the current system. Again you'd have to be making so much money you can AFFORD to expand. And again there was a world wide boom associated with technology/productivity from 40s-80s allowing people to expand regardless of taxes.

So tell me how does one expand if you take more money and they can't afford to create jobs. Oh usually you'd take a bank loan out or get investors, but we want to tax the shit out of those people too.

High taxes just create higher risk, to start a job, to invest, to do anything with money. It means margins are slimmer and there is less capitol all round to start something. Its a pretty trivial concept...

@waahahah: I see you conveniently deleted your comment about single mothers giving their children a stable home. If they aren't stable which you stated then they would have to give them up to change the situation. There is no instability in government assistance of food stamps and rent money. The basics are covered. So explain what you meant by that stupidity.

Learn basic English.

Not talking about is ignoring corporate welfare. Stupid....learn basic English etc.

You stated black people were doing better when there was explicitly more racism. Direct quote. That's a bigot talking. Sound like the Spencer guy from a white supremacist group actually. Pretty stupid.

Yeah I don't think you have the right to call anyone else stupid.

I've never said anything about a welfare queen.

@perfect_blue: When you call him out on his racism and stupidity he tells you he didn't say that.